Harnessing the Indian Sun Alan Rosling Chairman, Kiran Energy May 2012 Private and Confidential
Introduction to Kiran Energy Project Management Leading Solar Power IPP in India ● with 75 MW contracted capacity Professional Management Team 25MW operational ● Project Financing 50MW of contracted capacity in ● Strategic Relationships development in 2012 Focus on grid connected and Strong Equity Backing ● corporate captive solar photovoltaic Land Banking power plants in India Funded by a consortium of private ● equity investors Promoted by : ● Ardeshir Contractor: Former ● Managing Director of KPMG India Alan Rosling: Former Executive ● Director of Tata Sons Joint venture with the Mahindra ● Group Private and Confidential
Indian Carbon footprint India - GHG Emissions Distribution (MT C0 2 - eq) 1 Per-Capita per capita CO 2 Electricity consumed Emission Region 3 (kWh) (tonnes) World 2752 4.38 US 13616 19.10 UK 6142 8.60 Power Sector key contributor to GHG China 2346 4.58 emissions India 543 1.18 Trend of GHG Emissions (billion tonne C0 2 - (billion tonnes) 4 eq) 2 Chin TERI Poznan Model 7.3 U McKinsey India Model 5.7 a TERI MoEF Model 4.9 S IRADe AA Model 4.2 NCAER CGE Model 4.0 Indi a U K 2 203 Source: 1. Indian Network for Climate Change Assessment – 2007, 2. World Bank Database, 3. International Energy Agency 2009, 4. GHG emission profile - Climate Modelling Forum, MOEF India Private and Confidential
High Dependence on Coal Energy security in India is ● Total Capacity – 199 weak GW (MW) Peak Peak Peak 65% of energy produced is ● Demand demand met Demand thermal and mainly using Deficit % coal Maharashtr 20200 14678 -27.3 75% of oil required a ● UP 11800 8680 -26.4 imported Andhra P. 13916 11336 -18.5 30% of coal required ● Gujarat 11832 9569 -19.1 imported Tamil Nadu 12755 10616 -16.8 9% GDP growth shall ● Source: Electricity Survey, Central Electricity Authority All India 136193 118676 -12.9 Private and Confidential demand growth in Energy generation by 10%
Renewable Energy in India 23 <1 % 7% 39 2% % % achievement as on 31 Jan 2012 , * Estimated potential 20 MW/sq. km Source: MNRE Renewables only 12% of Indian electricity generation ● Focus on increasing share of Renewable energy ● 7 GW capacity added last year out of which around 3 GW had been from ● renewable sources Private and Confidential
Global Solar Industry Installed Capacity Country By end of 2011, over 64 GW Solar PV end of 2011 ● Germany 25 GW capacity installed globally United States 11 GW Exponential growth in last decade ● Spain 7 GW Germany – market leader ● China 8 GW India ~1 GW World solar radiation map Source: Solar PV Industry 2010 - Indian Semiconductor Association, BSW Solar – PV market, others Private and Confidential
Decreasing Cost of Solar Power Cost reduction coming from scale, efficiency and innovation ● 40% reduction expected by 2015, further 18% by end of 2020 ● Source: Solar Power – Darkest before dawn: McKinsey - April 2012 Private and Confidential
India Solar Resource Solar Resource India has a daily solar radiation of ● Map 4-7 KWh / m 2 with 250-300 annual sunny days. Rajasthan has the highest ● intensity of radiation (6 – 7 Kwh/m 2 /day) Solar insolation in Germany is ● about 3.15 Kwh/m 2 /day, significantly lower than India’s average India matches US as highest ● average annual solar energy yield (in kWh / kWp /year) Source: DLR, Fraunhofer Institute, DOE, NREL, Sargent and Lundy, McKinsey Private and Confidential
Policies – Central Government Jawaharlal Nehru National Solar Mission One of the eight mission under National Action Plan ● on Climate change Launched in 2009 with target of 20,000 MW till ● 2022 in three phases Reverse Bidding against Regulated tariff ● Solar power to be bundled with cheap power and ● PM Manmohan Singh announcing India’ sold to state utilities through central agency - NVVN s Solar Mission at the Copenhagen Climate Change Summit 2009 Kiran energy won 5 MW in phase I (tariff Rs. 11.89 ● /unit) and 50 MW in Phase II (tariff Rs. 9.34/unit) Solar PV Batch I Batch II MW 150 350 No. 30 28 Avg. Tariff 20000 (Rs. /unit) 12.16 11.89 MW by 4000 Dec 2022 MW by ● Phase 1100 Dec 2017 III ● Phase MW by II Dec 2013 ● Phase I Private and Confidential
Policies – State Governments Gujarat Phase I & Phase II ● ● 959 MW already allocated under Phase I and II; ● 601 MW commissioned ● Establishment of Asia’s largest solar park Rajasthan State Policy ● ● 100MW for Solar PV projects allotted with target 600 MW by 2017 Karnataka State Policy ● ● Invited for bids for 50 MW Solar PV projects and 30 MW solar thermal projects ● Target of 200 MW by 2016 Orissa State Policy ● ● Total capacity: 25 MW Solar PV, Bidding Mr. Ardeshir Contractor collecting Allotment in Feb Letter from Mr. Narendra Modi, Chief Minister of Gujarat Private and Confidential ● Lowest tariff: Rs.7/unit
Renewable Purchase Obligation With aim to derive 15% of State wise Solar RPO targets ● (2012-13) energy requirements from renewable sources by 2020, Regulators have mandated RPO including solar RPO on Distribution utilities ● Captive consumers ● Open access consumers ● State governments have ● introduced solar RPO with interim targets with target of 3% by 2022 RPO can be met by generation ● or power purchase or Renewable Energy Certificates (RECs) Strict enforceability mechanism ● by way of penalty of forbearance price of REC – currently Rs. 13/unit Private and Confidential
Solar Sector in India Solar projects to be commissioned by December 2012 Solar Sector in India (MW) Solar Sector in India is at very ● nascent stage Nehru National Solar Mission 500 (JNNSM) No long run ground station data ● Phase II coming up and unfinished Limited manufacturing capacity ● projects of Phase I, Migration and No experienced EPC ● Rooftop contractors Gujarat State Policy 965 Banks still learning the industry ● Phase III to award unfinished projects 2011 saw step change in of phase I and II ● India. Almost 1GW installed Rajasthan State Policy 216 Including PV and bundled capacity Merely 0.2% of grid interactive ● Karnataka Policy 120 renewable power Recently allotted projects under Higher potential than any ● policy other renewable sources in Madhya Pradesh Policy 250 India Development for RPO \ 1500 Total 3500 Private and Confidential
Opportunities and Challenges Opportunities Challenges ● Financial Health of State ● Strong political/regulatory Discom/ Offtakers support for Solar ● Price versus conventional ● Burgeoning energy demand power ● High Solar energy resources ● Financing costs ● Reducing cost/ Improving ● Land and community issues technology ● Clearances and Permitting ● Increasing cost of ● Substandard Grid conventional power infrastructure ● Implementation challenges Private and Confidential
Solar Economics Impact of solar on electricity Solar Parity pricing ● Total Generation – 900 bn kWh ● Reduction in cost as result of scale ● 2 GW of Solar Capacity expected and innovation. in 2012 ● Cost of power from conventional ● Expected Solar Generation only sources are increasing due to 0.3% higher fuel costs ● Tariff impact assuming distribution ● Grid parity by around 2017 at to all users – Rs 0.03 / kwh around Rs.6 ($ 0.12)/unit Source: KPMG Rising Sun Private and Confidential Report
Looking Forward Grid Connected Solar ● System Large PV, CPV and CSP ● Off Grid Solar System ● Large PV/CSP – RPO, Captive ● Decentralized Solar power ● ● Roof top – Residential and Commercial ● Rural Electrification ● Innovative land use (canal, dam, tower, border land, etc) Solar thermal applications ● ● Water Heating ● Industrial thermal application including cooling Hybrid technologies ● Private and Confidential
Positive Outlook ● Major Captive Power consumers have to fulfil RPO obligations ● Diesel gen-sets being replaced by solar Private (in MW, YE Mar 31) Compan Achievement of ies Grid Parity CAGR (2018–22): 60% CAGR (2012–18): State 53% Level Solar Policy Source: Broker research, KPMG. ● State Government National Level implementing Solar Indian Solar Market is expected Policies to meet RPO Solar Policy Obligations to add 2-3 GW per annum for ● DISCOMS have rising RPO obligations next 5-6 years ● Target of 1100 MWs by 2013 ● Target of 20 GW by 2022 Private and Confidential
Enablers Policy ● 60 GW Policy to achieve scale and hence lower cost ● Roadmap of additional annual capacity ● Stability of regulation equals ● Technology ● Access to latest global technology 102 ● Local Production ● Financing MTPA ● Equity ● of Debt (long term, rupee, fixed rate, structured) ● Credit Enhancement (REC market, Offtakers) ● Carbon Development support for off grid application ● Private and Confidential
Thank You! arosling@kiranenergy.com Private and Confidential
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